The telco industry is developing rapidly. For example, key topics that the TM Forum has identified and discussed for 2022 are end-to-end orchestrated flows for 5G; MEC and mobile private networks; and the telecommunications provider as platform operator. Even this excerpt from the list of current trend topics makes it clear that technology plays a decisive role in a CSP’s recipe for success, for without an appropriate technological basis, it is impossible to manage these tasks.

The problem: Currently, innovative measures and initiatives often fail due to the number of compromises that decades-old IT imposes. These are often historically grown, sluggish, complex and networked system landscapes in which a number of formerly monolithic systems have been extended by specialized satellite systems via a variety of different interfaces. The consequence: Quick adaptation of business processes to current market requirements is difficult. The same applies for the OSS and BSS layers.

Things that when they were created and even later on seemed sensible as a quick fix, or for which there was no alternative, now present new challenges:

• Complexity and dependencies: A heterogeneous application network means that release upgrades have to be planned precisely and are especially time-consuming, since communication between the applications depends on defined release states.
• Susceptibility to errors and security gaps: Application components in a heterogeneous and complex application system that may also be distributed geographically are often subject to different responsibilities. The consequence: Friction losses and misunderstandings during coordination. Operation is usually associated with manual interventions. This increases the error rate. Since the heterogeneity increases the number of possible attack vectors and attacks can be hidden better, the overall system is less secure.
• Redundancies and inconsistencies: Due to individual data storage, data is replicated among the systems; there are few clear restrictions.
• Costs and customer experience: On the one hand, the complexity makes it difficult to offer a good customer experience; on the other hand, to adjust flexibly to changing influencing factors. Costs for operation, support, and maintenance increase exponentially.

Under these conditions, of course it is difficult to integrate new functions quickly and easily. That is, to launch innovations on the market quickly.

What Would the Optimal System Look Like?

Let’s take a step back and imagine what a system environment would have to look like if it was based on state-of-the-art technologies and should allow a CSP to implement innovations quickly and flexibly:

• Implementation according to design thinking: User-centered processes for developing solution approaches to complex problems
• Separation of concerns: Clean separation of the functional properties
• Contract first: Definition of interfaces before definition of the functions
• Headless architecture: Separation of back and front end
• Microservice architecture: Division of the core functions into modules
• TMF standards: Interoperability with other providers, customers, partners, and suppliers

Such a clear, modular architectural principle enables the quick adjustment or combination of individual services, and thus also the prompt implementation of innovations – which makes the company fit for the future. This way, the IT processes can follow agile business behavior. In its totality, this solution is called “composable business.” A modular structure and composability are not just the underlying concept for the construction of the IT, but also for the company’s whole architecture.

Many state-of-the-art software systems work this way and profit from:

• Fewer dependencies between the application parts
• Easier maintenance of the applications
• The possibility of organization in container structures (e.g. Docker and Kubernetes) and cloud environments
• Lower costs
• Scalability
• Reliability
• Composability: Quick adjustment, changing, and re-orchestration of individual services

Step-by-Step Instead of Big Bang

Now, however, CSPs do not have the luxury of building their IT completely from scratch. While on the one hand it is necessary to create the technological basis for future innovative developments, on the other hand it is critical to guarantee ongoing operation – and in case of conversions, to consider that mainframes are frequently essential, central elements of existing systems.

Implementing such conversions step by step with guidelines for a target architecture specified in advance has proven successful. “Lift & shift” projects, where legacy systems are hauled completely into the cloud, should be also avoided in favor of the new architectural principles. A stringent, modular structure ensures that the introduction can be done step by step in an evolutionary process – entirely without a big bang.

If as few of the modules as possible depend on one another, then existing applications and functional elements can be adapted to this architecture within the project. This way, it is possible to adapt the environment and also the business flows flexibly to changing external factors as part of a continuous process.

In its “Predicts 2022: Reshaping CSP Technology and Operations Strategies,” the market research and consulting company Gartner discusses how the success of new products and business activities requires changes in the operating model:

Finding the Right Software: “Buy & Build” Principle

Because no software program can fulfill all of a CSP’s needs from the get-go, it’s worthwhile to pursue the “buy & build” solution for the conversion; that is, to start with standard software with appropriate basic functions and to expand it piece by piece. Here it has proven effective to rely on an adaptive mix of best-of-breed and open-source software. The following elements are important:

• Functionality
• Modularity and granularity
• Orchestration of the modules
• Architecture and interfaces
• Standards
• Cost structures

Thanks to the modular structure, the functional levels can be organized in layers that take on specific tasks.

It is also possible to address customers uniformly if customer contact is supported in the course of integrated flows across a wide variety of platforms and interfaces, for example websites, mobile app, e-mail, and also call centers and branch offices.

A system constructed according to these principles is not just enormously powerful, it is also equipped with wide-ranging (and expandable) functionalities, and it can be operated in cloud-native fashion.

Example of A Composable, Modular System

Composable business: Potential for the future, security for the present

Legacy systems and ongoing operation are no obstacle to implementing innovations, developing new services, and adapting the business model constantly to customers’ needs and current circumstances. Such an approach is effective in the long term, especially if the CSP pursues a composable business solution.

For step-by-step implementation, cooperation with partner companies that have expertise and experience in system analysis and the planning, implementation, and execution of such projects pays off.

Authors

Steven Bailey, Chief Strategy Officer, AOE GmbH

Steven Bailey has many years of expertise in digital transformation of international companies and the development of their business and IT visions. As Chief Strategy Officer at AOE, he is responsible for business development and customer consulting in the area of digitalisation and omnichannel e-commerce strategies.

One focus here is the development of B2X transaction portals and mobile solutions that enable companies to map new business models and generate sustainable revenue streams.

The clients he supports cover the entire range of industries – from wholesale and retail to telco, aviation, automotive, industry and life science.

In addition, the native Briton looks back on more than 20 years of experience in international brand communications and has won numerous corporate design awards. Bailey is also responsible for the idea and concept of the recently published Telco Trendbook “In 4 Steps Towards Composable Business”

Uwe Ritter, Board of Directors, People at Work Systems AG

Uwe Ritter can look back on more than 35 years’ IT experience. After completing his computer science degree in Ulm in 1983, he worked for two years as a development engineer at Dornier System GmbH in Friedrichshafen. After that, he joined Nixdorf Computer AG in 1985; he remained there in international marketing for Unix systems and as Director of the international Targon support until 1990. From 1990 to 1996, he built up the technical marketing department at Oracle Deutschland GmbH.

In 1996, Uwe Ritter was a founding member of Siebel Systems Central Europe. During his first years there, he was responsible for establishing sales support and marketing activities; then he took on various management positions in Siebel product marketing, and was finally responsible for Siebel’s entire technology basis as Executive Director. At the beginning of 2004, Uwe Ritter joined People at Work System AG as shareholder and chair. He is responsible for the areas of products, consulting, and development.

‘No more fun in the sun’

Perhaps it was inevitable, and we should have seen it coming. However, it’s hard not to feel disappointed by the reintroduction of roaming charges from a barrage of UK mobile network operators (MNOs). For the average customer, the charges likely mean one less Cornetto around the pool. However, businesses gearing up for international expansion may face more significant consequences. Here, Ginelle Bell, UK country manager at VoIP call provider Ringover, explains how UK businesses can overcome roaming reintroductions. 

The holiday is over. For the past five years, the UK has enjoyed a hiatus from roaming charges, thanks to its position in the European Union (EU). Since 2017, mobile networks in EU countries have been banned from charging customers extra to use their phones in other member countries. When the UK officially departed from the EU earlier in 2021, MNOs including EE, Three and Vodafone, all pledged that they wouldn’t reintroduce the charges, even though they could.

However, over the course of the year, the plans of all three providers have changed course. Currently, O2 is the only remaining MNO of the “big four” UK operators to stick to its guns. 

Global growth

Now, UK customers who wish to use their phones in European countries may soon either have to pay to use their phone’s data allowance, or start paying for data once they hit a certain cap, which either didn’t exist before or was previously higher.

Changes might not seem too significant, but they have stung people in the past. Before the EU’s Roam like at home legislation, travelers frequently hit the headlines after falling victim to unexpected charges. One person, a chef sailing the Greek islands, was infamously charged £8,000 for just 40 minutes of data roaming in 2017. Their phone inadvertently connected to a Turkish mobile network whose signal was transmitted apparently from Turkey or a passing boat — using 455MB of data.

It’s a history lesson nobody would like to be repeated. At the same time, if projections for the UK’s economy become true, more business travelers could risk being affected by roaming than ever before. Research by Globalization Partners in 2020 revealed that 45 per cent of businesses are either currently expanding globally or only slightly delaying their expansion, even after the pandemic. 

Those wanting to grow their overseas presence most certainly won’t want to worry about being stung by unexpected charges. For companies growing teams — or setting up entire branches — abroad, having access to technology that facilitates simplified, effective communication will prove key to their success.

The VoIP era

One thing businesses can do to prevent hefty roaming charges is ditch phone calls altogether. And many already are. Recent analysis by Ringover into the latest Ofcom data, indicates that the office landline will become extinct by 2028. Business landline numbers fell by 370,000 in a year to just 4.98 million in 2021, and numbers could drop to below 1 million as early as 2026. Suddenly, having a traditional phone system sounds a lot less appealing.

Instead, businesses are opting for Cloud-based replacements such as Voice over Internet Protocol (VoIP) call solutions. The demand for unified communications (UC), which encompasses all collaborative communication tools, enjoyed a 60 per cent year on year growth across Europe in 2020 as more businesses invested in voice solutions. Because VoIP technology relies on the Internet to make and receive calls, and it can be configured to support text messaging capabilities, it’s clear to see why businesses are keen to ditch the landline.

When choosing a VoIP service, businesses can select either a fixed or non-fixed number. Both options work in similar ways, and can lower the cost of communication by as much as 30 per cent. However, there are some differences that customers should consider. A fixed VoIP number is linked to a physical address and is assigned by a service provider with a network linked to the common public switched telephone network. 

Fixed VoIP numbers are Internet-based, but they remain similar to traditional phone lines in that they require a physical address to be provided in exchange for service. This can give fixed VoIP numbers better credentials, as customers may feel more inclined to pick up calls from known addresses. 

Non-fixed VoIP numbers, however, are not linked to a physical address. They have the same calling capabilities as fixed numbers, but are not tethered to a geographical location.  As a result, accounts can be created to service any desired address and businesses can contact customers all over the world with ease. 

Businesses may want to establish non-fixed VoIP numbers if they want to grow a local presence overseas. Because non-fixed VoIP numbers aren’t linked to a specific location, businesses can adopt a local address in the country they wish to target, even if they’re not physically located there, which could prove a cost-effective solution to international expansion. 

Non-fixed numbers can lack the authenticity of fixed VoIP numbers. However, if a business’s main goal is to expand overseas, and then prove its credentials, it offers a cost-effective solution that eliminates reliance on expensive fixed lines. Whichever option is right for your business, having access to the right provider is crucial. Ringover, for example, provides calls to 110 destinations, offering precise, transparent rates for all destinations outside the UK.

Changes to roaming charges won’t just affect holiday-goers. Any business that wants to expand internationally will need to consider how their global business will communicate moving forwards. It could be wise to ditch traditional telephony methods altogether, and embrace a reliable, easy-to-use VoIP solution. 

“The customer is king” – this claim is anything but new in the telco industry, but now it is fortified by the amendment of the telecommunications act (TKG). In force since December 1, 2021, the update of the TKG especially grants customers additional rights with regard to termination periods, reimbursements, and transparency. Meanwhile, a new paradigm can be observed in the telco market: In contrast to before, today customers, that is the people signing the contracts, are no longer essentially identical to the actual users. This applies in the B2C sector, for example when parents sign mobile phone contracts for their children, as well as in the B2B sector, with company mobile phones.

This means that if CSPs make the actual customer king, their measures will only be addressing the people who signed the contract, not necessarily the users – so they are gambling away a lot of potential for additional business.

How should CSPs address the right target group?

The first step is to identify the actual users and analyze their needs in order to be able to make them custom-tailored offers directly and in personalized fashion via suitable measures.

In the B2C sector, for example, this can be done with family packages: One person is the customer who manages the contract, but the individual users can adjust their rates within a specified framework – or they receive upselling or discount offers that are interesting for them.

Things work similarly for business rates. For companies, cost pressure and cost control are particularly relevant: It must be possible to plan costs in the long term. The CSPs can solve this problem with scaled fixed-priced packages and dynamic locks.

Important for all measures: an analysis of user data in order to be able to fine-tune the personalization of offers in the future – and thus to generate more sales.

How can a CSP succeed in making customers loyal today?

With regard to users, there is another development that we have observed: It’s becoming ever more difficult for CSPs to retain their customer base. Various telcos’ offerings hardly differ from one another, which means that users are often tempted to change providers – and thanks to the amendment of the TKG, they are better able to do this. At the same time, the market for new customers is limited. To acquire or retain customers, telcos need products and offerings that distinguish them clearly from the competition – and this with the shortest possible time-to-market, for the market moves quickly and is characterized by constant change.

In this context, a proven strategy is for CSPs to rely on alliances and service co-creation. For of course no provider can offer all the services that users need or expect all by itself. Thanks to cooperations and alliances with other service providers and manufacturers, telcos can develop innovative products and services much more quickly and launch them on the market. Examples include bundling offers with entertainment, gas, power, and smart home.

Furthermore, internally, if they are able to re-think traditional basic business paradigms and think ahead innovatively in order to develop new products – even given the risk that these may not succeed and will have to be discarded – they can create the basis for long-term success.

Fit for the future with composable business

In summary, we can conclude that the focus must be placed on the actual users of the services and their needs – even if this means blazing new paths. So that this succeeds given rapidly changing market circumstances and technological possibilities, one thing is necessary above all: Flexibility in the business model. For the required speed will never be achieved with the slow decision-making processes in traditional company structures.

In its “Hype Cycle for Communications Service Provider Operations 2020,” the market research and consulting company Gartner says: “As communications service providers (CSPs) progress with digital transformation, they are facing many competitive pressures from inside and outside their industry. Unlike in past, the ongoing transformation is not merely for simplification or processes optimization or a new product launch or for better customer experience. It is all of such goals and enabling economic efficiency, new business models, diverse products and growth. These goals cannot be met without significant transformation of operations – particularly for network-based CSPs.”

A solution that has proven itself for telcos in this context and one that is also recommended by Gartner is the composable business model, a strategy that companies can use to achieve the agility required for a successful market presence step by step. Here, “composable” means structured in modular form so that flexible configurations and combinations are possible – and it refers equally to the company architecture, the technologies, and the mindset.

Structured in this way, a CSP is optimally equipped to respond to the demands of the market and the needs of its users, not just today, but in the long term – entirely in the spirit of “long live the user.”